A recent decision of the Fair Work Commission (“FWC”) relating to paid parental leave not only serves to highlight the importance of unambiguous and careful drafting, but also the risks employers are exposing themselves to should they leave the door open for the FWC to interpret vague terms. 

The background  

The employee took a period of paid parental leave (“PPL”) which was an entitlement under his enterprise agreement (the “Agreement”). This clause provided a paid leave entitlement to non-primary caregivers of five days. Upon return from leave, the employee made enquiries with the employer as to an additional period of paid parental leave pursuant to a separate clause of the Agreement which provided a paid leave entitlement to primary caregivers of 11 weeks. An application under this separate entitlement was made and subsequently rejected by the employer. 

The employer contended that the employee was not entitled to take PPL as a primary caregiver when he had already taken PPL as a non-primary caregiver, describing the entitlements under the Agreement as “mutually exclusive”. 

What the FWC said 

The employee’s union challenged the employer’s position in the FWC where it was initially determined that the employee was excluded from accessing PPL as a primary caregiver as he had already accessed the entitlement as a non-primary caregiver. 

This decision was subsequently appealed by the union and the matter was heard by the Full Bench of the FWC where the decision was overturned. In finding in favour of the employee’s entitlement to both periods of PPL, the Full Bench stated that “as a matter of ordinary language, an employee may be the primary caregiver at one point in time and a non-primary caregiver in another period depending on the allocation of caring responsibilities”. There was nothing in the Agreement which indicated that the terms were mutually exclusive and the employee was entitled to take two periods of PPL. 

The approach adopted by the Full Bench highlights the need for clear drafting to give certainty to employers and employees. While the Agreement used plain language, when it came to the construction of the relevant terms what was required was that the employer explicitly state that an employee can not take two periods of PPL.  

Key takeaways for employers 

At the centre of this decision lies the well-established principles of interpretation which should at all times remain at the forefront of employers’ minds when drafting enterprise agreements. When drafting an enterprise agreement, employers need to turn their mind to how they want a clause to operate in practice.  

In the absence of clearly drafted terms of an enterprise agreement, the FWC can intervene and determine the meaning of a clause.  

Parental leave is generally a complex area requiring employers to be across entitlements under the National Employment Standards, Paid Parental Leave Act 2010 (Cth) and any employer schemes under a policy, enterprise agreement or other industrial instrument. It is also an area that has been subject to some material changes over the past couple of years (you can read about some of the changes in our blog here). Employers preparing employer schemes (including those in enterprise agreements) should be careful about the intended entitlement they are providing employees. Clear language should be used, terms must be defined, and the intention of a clause should be explicit.